Govt to transfer management control of 8 loss-making ITDC hotels

According to hospitality consultants, some hotels may be offering significant discounts because of revenue management issues or distribution linked challenges. NEW DELHI: Government has hired consultancy firm Ernst&Young (EY) to select bidders for managing eight loss making hotels run by India Tourism Development Corporation (ITDC).

Sources said that there will not be any outright sale of ITDC hotels and they would be handed over to the best bidders on management contract basis.

"It is only (transfer of) management to the best bidder," the official said when asked whether the government is planning to sell the eight hotels.

"EY will do the valuation. The process will start next month," the official told PTI.

The eight hotels, which are likely to see management change include those at Jaipur, Bhubaneswar, Puri, Jammu, Guwahati, Ranchi, Pondicherry and the Lalitha Mahal hotel in Mysore, all of which are loss-making.

ITDC, a PSU under the Tourism Ministry, runs 16 hotels including three in Delhi and the rest in Jammu, Ranchi, Bhubaneswar, Puri, Patna, Bhopal, Bharatpur, Jaipur, Guwahati, Pondicherry, Mysore and Itanagar.

The Ashok, the flagship property of ITDC in the capital, alone incurred a loss of about Rs 13 crore in 2014-15. However, the government has ruled out the possibility of selling it off.

Other ITDC hotels together ran up losses of about Rs 15 crore in 2014-15.

During NDA's first stint in power between 1999 and 2004, the then Vajpayee-led government had divested 18 ITDC hotels, bringing down the number of state-run hotels from 34 to 16. Besides, the network of hotels, ITDC also runs 11 transport units, nine duty-free shops at airports and seaports.